Infrastructure projects pushed to pump-prime economy

The government will push state agencies to spend more on various infrastructure projects as part of efforts to pump-prime the economy amid a global financial turmoil, a Cabinet official said.

Socioeconomic Planning Secretary Ralph Recto said that during the first Cabinet meeting of government next year, officials would discuss how to enable agencies to spend more on various infrastructure projects.

“The first Cabinet meeting in 2009 will require infrastructure agencies to increase their absorptive capacity,” Recto said.

The National Economic and Development Authority (NEDA) chief said agencies can do simple infrastructure projects such as farm-to-market roads, repair and rehabilitation of primary and secondary roads and building small hospitals.

Recto said infrastructure projects for 2009 can be those with simple engineering design and no right-of-way issues.

He said budgets for agencies that have difficulty spending should go to other offices that can utilize the funds better.

Another option, he said, is for the key implementing agencies to outsource some of their infrastructure projects.

The government must more than ever continue to invest in much needed infrastructure, simplify government processes to bring down the cost of doing business and push for policy reforms in key sectors in order to put in place a solid foundation for a higher growth trajectory in the future, Recto said.

Recto expressed hopes that Congress passes the P1.415-trillion budget for 2009 as soon as possible so it can utilize the funds in the first two months of next year.

The government has an economic growth projection of 4.1 percent to 4.8 percent for this year and a growth forecast of 3.7 percent and 4.7 percent for 2009.

Recto said these targets can be achieved if the government successfully spends on various infrastructure projects.

In 2007, the Philippine economy grew by 7.2 percent.

The local economy, he said, is facing tough challenges from the weakening of the United States dollar, the hurricane in the US which could both affect income of the country’s exporters and other geopolitical concerns such as the volatility in the oil market. –Iris C. Gonzales, Philippine Star